CANADA FX DEBT-C$ weakens amid trade uncertainty, oil prices dip

    * Canadian dollar at C$1.2999, or 76.93 U.S. cents
    * Price of U.S. oil falls 0.2 percent
    * Bond prices lower across the yield curve

    TORONTO, June 12 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday, pressured by an
uncertain outlook for the country's trade with the United States
and lower oil prices.
    U.S. President Donald Trump insisted he had a good
relationship with Justin Trudeau, just days after blowing up a
G7 summit the Canadian prime minister had hosted. But Trump took
another dig at Trudeau, saying the United States had a big trade
deficit with Canada and that "a little balance" was needed.
    The U.S. president's comments come amid slow-moving talks
between Canada, the United States and Mexico to modernize the
North American Free Trade Agreement. Canada sends about 75
percent of its exports to the United States and its economy
could be hurt if NAFTA were scrapped.    
    The price of oil, one of Canada's major exports, dipped even
as comments from the Iraqi oil minister cast doubt on whether
the Organization of the Petroleum Exporting Countries would
decide to boost output at its upcoming meeting.             
    U.S. crude        prices were down 0.2 percent at $65.98 a
    At 9:14 a.m. EDT (1314 GMT), the Canadian dollar         
was trading 0.2 percent lower at C$1.2999 to the greenback, or
76.93 U.S. cents. The currency traded in a range of C$1.2977 to
    Last week, the loonie touched its weakest in 2-1/2 months at
    Canadian government bond prices were slightly lower across
the yield curve in sympathy with U.S. Treasuries after data for
May showed the biggest advance in U.S. consumer prices in more
than six years.             
    The two-year            fell 1 Canadian cent to yield 1.91
percent and the 10-year             declined 8 Canadian cents to
yield 2.315 percent.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)